Nippon Active . Regulatory News (NAVF)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.

The information communicated in this announcement is deemed to constitute inside information as stipulated under the UK Version of Market Abuse Regulation (EU) No. 596/2014 (as incorporated into UK Law by virtue of the European Union (Withdrawal) Act 2018, and as subsequently amended ("MAR"). Upon the publication of this announcement, this information is considered to be in the public domain.

18 May 2023

Nippon Active Value Fund plc

LEI: 213800JOFEGZJYS21P75

Rollover from abrdn Japan Investment Trust plc

The Board of Nippon Active Value Fund plc (the "Company" or "NAVF") is pleased to announce that heads of terms have been agreed for a proposed rollover of the assets of abrdn Japan Investment Trust plc ("AJIT") into the Company.

The rollover, if approved by each company's shareholders, will be implemented through a scheme of reconstruction proposed by AJIT pursuant to section 110 of the Insolvency Act 1986. This would result in the voluntary liquidation of AJIT and the rollover of its assets into the Company in exchange for the issue of new NAVF shares to AJIT shareholders who elect to roll their investment into the enlarged fund. AJIT shareholders will be offered the option of a cash exit for up to 25 per cent. of AJIT's shares in issue, providing shareholders with the ability to realise part (or potentially all) of their investment at a 2 per cent. discount to formula asset value ("FAV") per share (the "Transaction").

New NAVF shares that are issued to AJIT shareholders will be issued on a FAV-to-FAV basis. FAVs will be calculated using the respective net asset values of each company, adjusted for costs payable by the relevant company in relation to the Transaction and any dividends and distributions declared by each party which have a record date prior to the effective date of the rollover of AJIT into NAVF.

Following completion of the Transaction, it is expected that one director from AJIT's board of directors, will join NAVF's Board, taking the number of directors on NAVF's Board to six.

Rising Sun Management Limited ("RSM") has agreed to pay for AJIT's costs to implement the Transaction up to a cap of £800,000.

Benefits of the Transaction

The Transaction would result in the Company becoming larger with a more diverse shareholder base and greater assets and is expected to improve liquidity in the Company's shares as well as spreading the fixed costs of the Company over a larger pool of assets.

Transfer of Listing Segment

Simultaneously to the issue of new shares in the Company to rolling AJIT shareholders, the Company has undertaken to move to a premium listing on the Main Market of the London Stock Exchange, which is expected to improve the access of retail investors to the enlarged Company and therefore its share rating and liquidity.

Investment Policy

Although the strategies of the Company and AJIT are similar with respect to their holdings of Japanese listed securities, in connection with the Company's proposed admission to the Official List of the Financial Conduct Authority ("FCA") and the acquisition of certain assets from AJIT, the Company's investment policy will need to be amended to, amongst other matters, increase the number of investments typically expected to be held in the portfolio and to provide greater flexibility in relation to the expected size (as a percentage of issued share capital of the portfolio company) of those investments. The amendments, if proposed, will be subject to the prior approval of shareholders.

Approvals

Implementation of the Transaction is subject, amongst other matters, to the final approval of the boards of directors of the Company and AJIT, the approval of the Company's shareholders, the approval of a prospectus in relation to the Company's shares and its move to the Official List by the FCA, a clearance from HMRC in respect of the Transaction and the approval by the shareholders of AJIT. A circular providing further details of the Transaction and convening a general meeting to seek the necessary shareholder approvals will be published by the Company alongside the prospectus as soon as practicable. It is anticipated that the Transaction will be implemented in the third quarter of this year.

Joh. Berenberg, Gossler & Co KG, London Branch has been appointed as Sponsor and Financial Adviser to the Company in relation to the Transaction.

City Code

In accordance with customary practice for section 110 schemes, the City Code on Takeovers and Mergers is not expected to apply to the Transaction.

Rosemary Morgan, Chairman of the Company commented:

"I am delighted that we have reached a preliminary agreement in relation to this combination. The increased assets which the Transaction would deliver will continue the growth and success of the Company, benefitting both our existing shareholders, but also the AJIT shareholders who become part of a larger entity with an excellent track record and greater economies of scale. The Board is grateful to RSM for the support it continues to show the Company, in this case by generously paying a substantial proportion of the Transaction costs. We look forward to a swift conclusion of the Transaction and to welcoming AJIT shareholders to our enlarged Company."

Enquiries

Berenberg Gillian Martin / Dan Gee-Summons/ Arnav Kapoor

Tel: +44 (0)20 3207 7800

Company Secretary Brian Smith/Maria Matheou

Tel: +44 (0) 20 3327 9720

Important information relating to Sponsor and Financial Adviser

Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") which is authorised and regulated by the German Federal Financial Supervisory Authority and deemed authorised and subject to limited regulation in the United Kingdom by the FCA, is acting solely as sponsor and financial adviser to the Company and for no one else in relation to the proposed transaction, and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Berenberg or for providing advice in relation to the proposed transaction, the contents of this document or any other matters described in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Berenberg by FSMA or the regulatory regime established thereunder, Berenberg does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including as to its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the proposed transaction, whether as to the past or future.